Why Does an iPad Mini Cost So Much?

11/5/2012 5:23AM

A breakdown of the key components of the iPad Mini reveals that Apple's profit margin is more than 40% for each tablet. The WSJ's Juro Osawa talks about what's inside an iPad Mini and possible changes at Foxconn.

This transcript has been automatically generated and may not be 100% accurate.

I ... the ... what ... I had he knew what I see as I supply side is that ... the new I pad Meanie has components one hundred and eighty dollars ... joining me now is euro selling agent at the point ... Joe thanks for joining us today ... so this year it would add that the I pad Meanie has components with immediate dollars ... the I pad and sells for three twenty nine so there's the history of the gap ... um can you tell us obviously Apple's making a big ... fan of this ... this new device by love this kid on so that ... all of the combined cost of components to two ... hundred and eighty eight ... and I pad Meanie just came out last Friday ... and a lot of people actually thought the price ... was set quite high ... Street starting at ... three twenty nine ... so aam ... could compared to some other tablets of similar sizes seven inch tablets by ... Amazon approval of the already in the market ... this price is a bit higher so aam some people think that's Apple's user strategy of trying to make you know ... make sure that it can make money with the ... with ... its devices ... of but ... this shows also that ... I'd use it to ... Hong ... know what the merchants margins will be on the ... I pad Meanie pie ... and apple is usually very quiet about some of its suppliers then the companies that supply parts for their devices ... but I HSI supply chain to a report shows that they are some companies that supplied the key components can you walk the ... walk to the key and can companies are ... right the displays so it's the screens are made by ... two companies LG Display the Korean company ... and that Taiwan's ... EU Optronics I'm done ... something that she still supply some other components a professor tips and on ... but the reports also ... kind of showing that ... Apple might be looking at some other alternatives says Thompson ... when it comes to some other components ... where they can find other major suppliers and that ... is ... they found out that memory chips are at ... war and allied using some sense but ... that doesn't mean on this sunny mean that ... they're not using some says ... the memory chips at all because usually they use multiple suppliers ... so that those their guns ... gone the sun cover ... all that that means that on the market ... I mean is this a sign that the pet litigation between Samsung and Apple is ... leading towards Apple and Samsung community for them for their part ... that's a lot of lot of people think about ... of course that neither one of those companies would ever ... know come come out and say that to be on its ... North teams with each other because of this on court battle that they're ... last in ... but um some of those component ... supply a reports show that sound ... it could be the direction that it's going but ... still some say is a major supplier of ... chips and also display panels ... so it ... he also shows how difficult it is even if the full ... force to try to avoid some some newbie so quite difficult right ... now that HUN Jai is when the band majors and minors for invested by ... oh we also saw Foxconn International shares today surging more than thirty percent ... can you tell us why the shares rose so much today in Hong Kong ... this ... might be quite different from what we ... got home ... Foxconn International which is a subsidiary of ... HUN Jai ... HUN Jai is actually this ironies company and that ... we have using known as Foxconn so is this Foxconn remain ... on high ... end of ... this Foxconn International which is listed in Hong Kong it's the small subsidiary ... the make some smile Phones assemble a smart phones from Nokia summit present and doesn't really have a lot to do with time ... it doesn't bought um ... some analysts reports over the weekend showed that ... the Fed said that done this Foxconn International the subsidiary ... is starting to make more Apple products on so-called high ... the parent company Foxconn ... is shifting some of its Apple production to ... date of the subsidiary so the lists of ... market people think that's the reason that says when up so much because ... of this small subsidiaries part of the Apple supply chain ... that's very interesting ... anything to do with me the labor unrest that time has been experiencing in China and maybe this might be hankies to to ... to look at another company to assemble the apple that is not the case here ... um this is again I've those those supports ... I still under eighty confirmed right and that ... of Fox one hasn't said ... why they might do that much of some the production but ... it does come to from the time ... during this time and Foxconn Missouri ... trying hard to make sure that aam ... why and it's in a labor sizes of ... power ... note ... the investigators so they can agree ... that trying to tackle the problem and also ... um some of the um I phone five production ... it has been reported that Zino this ... being the ... amazing ... um you ... know that but then I'm ... supply might now be catching up so it could be on the reasons that it's ... it also reliant on a subsidy but ... at this point it's still very much